The immediate impact of the COVID-19 pandemic has been the closure of thousands of businesses and events across the country, including retail stores, restaurants, theaters, bars, and sporting events. While these measures are in place to hopefully contain the viral spread, many companies have been left reeling as to how to proceed and recover from these temporary closures. To help provide clarity, we offer some basic information about Commercial Insurance in light of these closures.
- There is NO property damages coverage for infections or communicable diseases on any admitted carrier policy.
- Workers Compensation will only pay a claim IF a worker gets sick from work-related tasks; for example, a hospital employee handling linens or medical waste. Workers would also have to be able to prove the origin of their illness as part of their Workers Compensation claim.
- General Liability coverage may protect a business from a third party claim if the business is found negligent in protecting the public from the virus on their property. In the state of Florida a lawsuit has already been filed by a couple suing a cruise line claiming the cruise company should have protected them better from getting the COVID-19 virus.
- Business Income Interruption coverage originates under the Property portion of a commercial policy, and this portion clearly states what perils or causes of damage are covered by the policy. Insurance policies do not cover the loss of business income due to Infectious Disease Exclusions found in this section. As mentioned in item 1, infection and/or communicable diseases are excluded from most if not all policies.
While business insurance might not be able to help financially during COVID-19 closures, companies can get more creative with their insurance expenses in order to help ensure a successful recovery later. Companies should consider evaluating their current coverage to reduce their monthly premium, including raising deductibles as well as revising coverage limits and sales figures. In addition, businesses might discover that they are overinsured or have property limits that are far too high and can be reduced, which could also lower their monthly expenses.
At Aegis Insurance & Financial Services, we are happy to help businesses in need during these challenging times. For a review of your current commercial insurance coverage, or for more information, please contact our Aegis office at 713-850-7622.